Drumbeat: November 14, 2009

Are the Saudis prepared to constrain oil prices to weaken Iran? It's an intriguing possibility that, if implemented, could have major implications for U.S.-led efforts to curb the Islamic Republic's nuclear program.

...The Saudis have said that $75 per barrel is an appropriate target price. This week, a Saudi government advisor told the press that, at over $80 per barrel, prices had reached "the high end of our range" and any further rise could prompt the Kingdom to further tap its unused capacity -- which currently stands at approximately 4 million barrels a day.

The Saudis have publicly explained their effort to moderate prices as a function of their desire to protect a fragile global economy. But it's hard not to notice that the Saudi strategy also has the side benefit of pinching Iran. Specifically, while the Saudis in 2009 require an average oil price of about $51 a barrel to cover their budget, Iran needs an average price in excess of $90. If the price holds steady at the Saudi-designated range of $70-$80 for the rest of this year, the Saudi treasury could come in with a slight surplus. The Iranians, by contrast, have reportedly been forced to consider phasing out food and energy subsidies in an attempt to battle their looming fiscal problems.

Pemex, as the national energy company is known, has been unable to increase production as mature fields yield less. It also can’t find new ones fast enough and exploration in deep waters is slowed because of a lack of technology. Foreign oil companies have shown little interest in working in Mexico because laws that were changed last year to allow them to explore for oil still ban them from being equity partners or owning the oil they find.

“The ridiculous thing is that the Gulf of Mexico is full of oil and we can’t get to it because we don’t have sufficient flexibility in our legal framework to induce foreign investment in these fields,” he said. “We used to produce 3.3 million barrels per day a few years ago, and this is down to 2.5” million barrels, Ortiz said.

MONTREAL - Recent energy and other developments in Southwest Asia, particularly involving Turkey, Iran and Iraq, sketch the outline of an imminent reorganization of international relations in the region. This will have knock-on effects for Eurasia as a whole and the shape of the international system in coming decades.

At the same time, it suggests new and unexpected relevance of the mid-20th century geopolitical theorist Nicolas Spykman.

(Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, reported third-quarter profit in line with analysts’ estimates amid a slump in crude prices and said that it expects to meet its Brazilian production target.

Secretary of the Interior Ken Salazar today announced the Department will hold an oil and natural gas lease sale for the Central Gulf of Mexico Outer Continental Shelf that will offer nearly 36 million acres and could produce up to 1.3 billion barrels of oil and 5.4 trillion cubic feet of natural gas.

A unique harvest season has created an increase in demand for the fuel source, as wetter crops coming out of the field have meant more time is needed to adequately dry them down.

The October rains put much of the corn crop being taken from the fields in the 30 percent moisture range, and that means reducing the moisture content before taking it to market – unless one wants to pay the drying charge at the elevator.

That demand has put more LP trucks on the road hauling the fuel from farm to farm to help keep harvest going. The problem is those supplying that fuel are having a difficult time keeping up with the demand.

Not only is this a dysfunctional market; it is also clear that much more of the world's energy needs to come not from oil or gas or coal but from wind or wave and other renewable sources. The solution may be to do something that was last successfully tried in the 80s – and fix prices for fossil fuels. This would not be a rerun of Opec, but would instead force producer countries such as Saudi Arabia to negotiate with a full range of consumer countries from Britain to Bangladesh. Oil could be charged at different rates to different countries, depending on their wealth. Rich nations would be charged full whack, to wean them off fossil fuels and on to green energy; the world's poor would pay less and would have greater certainty over their fuel bills. Part of the revenue would go into a pot to help poor countries deal with climate change.

World leaders cannot use the global recession as an excuse to delay action on climate change, according to leading economists. In a new analysis they predict that the economic downturn will cut carbon emissions by 9% by 2012 and delay the onset of "dangerous" climate change by just 21 months.

The report, published today by the ESRC Centre for Climate Change Economics and Policy, compared economic forecasts made before the recession with revised estimates that incorporate the contraction in the global economy. They used this to work out the knock-on effect on carbon emissions and hence the climate.

THE HAGUE (AFP) – The Dutch government said Friday it wants to introduce a "green" road tax by the kilometre from 2012 aimed at cutting carbon dioxide emissions by 10 percent and halving congestion.

"Each vehicle will be equipped with a GPS device that tracks how many kilometres are driven and when and where. This data will be then be sent to a collection agency that will send out the bill," the transport ministry said in a statement.

As the reality sank in about rising thirst and falling water tables and aquatic extinction, the usual suspects — all those noisy hand-wringing liberal environmentalists — prophesized their litany of doom, right on schedule. Only this time their worry was echoed by nervous conservatives, industrial interests and development boosters, also now preaching how the end of water was nigh.

Never mind the gloomy Club of Rome; bullish corporate titans at the World Economic Forum in Davos warned us how limits to growth came from scarce fresh water. Elbowing past picket lines of wild-eyed green protesters, some otherwise astute World Bankers were confounded at how, contrary to basic economics, water use grew less efficient as water grew scarcer. Goldman Sachs, a stodgy and sober Wall Street investment bank not given to hyperbole, grew increasingly alarmed that, by doubling every 20 years, global water consumption had attained an “unsustainable” rate of growth.

Santo Domingo.- South Korea will help fund the improvement of Dominican Republic’s historically deficient electrical sector, with several agreement signed this week, including a memorandum of understanding to conduct a study to solve the energy problems.

ALAMEDA COUNTY, CA (KGO) -- The Altamont is the world's oldest wind farm with some 5,000 power-generating turbines covering 50 square miles on the Alameda County border. While generating good green power for the state, it has a bad reputation for killing birds.

'The 12 million barrels is crazy,' Total CEO Christophe de Margerie told reporters late Thursday after a panel talk at Columbia University in New York.

'We know there's a potential to maybe reach 7 to 8 million barrels someday, and that alone would be a tremendous success.'

Total's CEO also said he was skeptical about the success of further oil field bidding rounds in Iraq after a first round in June was abandoned by most foreign majors, including Total, which protested stiff contract terms imposed by Iraq.

In a move that drew quick condemnation from the oil industry, federal officials said Friday they want to shorten the terms of a previously announced drilling lease sale on nearly 36 million acres in the Gulf of Mexico off the coasts of Louisiana, Mississippi and Alabama.

The proposed terms for the sale would set five-year terms for leases in water depths of 1,300 to 2,600 feet, instead of the eight-year term that has been typical.

As one chapter of misery, hubris and hypocrisy builds upon the next the reader is drawn towards Maass's conclusion: "You cannot navigate the violent creeks of the Niger Delta or visit the contaminated mess of Ecuador's Oriente region without thinking that everything would be better if oil had not been found." When it comes to remedies, Maass is on the side of pragmatism. The "Publish What You Pay" initiative could probably solve corruption, he believes; and there is probably already adequate technology to stop and reverse global warming, if only states would adopt it. He shies away from a more frightening scenario: that peak oil prompts a resource war in the next decade which sabotages humanity's collective attempts to attack global warming and, simultaneously, deglobalises the world economy.

MOSCOW (AP) -- Slovenia agreed Saturday to take part in a pipeline project carrying Russian natural gas to Europe, bolstering a Kremlin attempt to defend its position as the continent's primary supplier, news agencies reported.

Inside the Beltway, China is often cast as an environmental villain. Some lawmakers point to Beijing's skyrocketing greenhouse gas emissions as their main argument against any policy to cut U.S. carbon output. Others see China as a competitive threat, stealing both conventional and green jobs from American workers while already pulling ahead in the cleantech race.

But a new dynamic is taking shape that may transform this perception. Led by the likes of Duke Energy, Southern Co., and their Chinese counterparts, utilities from the world's two largest greenhouse-gas-emitting nations are collaborating on crucial technologies that burn coal more cleanly and help capture and store CO2 emissions. "There's a perception that the U.S. leads in this technology and China lags," says Armond Cohen, executive director of the Clean Air Task Force, or CATF, which has created a network of a dozen Chinese and U.S. utilities to work on developing cleaner coal methods. "That's not so. In some key areas, China is more advanced. There's a lot to share."

I recently attended a public showing of the film “Not Evil, Just Wrong” in Kalispell. Sponsored by the Northwest Montana Patriots, it was billed as a documentary exploring the economic impact of global warming “hysteria.” I hoped it would broaden my perspective on climate change issues, but the film was a disappointment.

First, while I hoped for an intelligent refute to the mainstream understanding of greenhouse gas pollution, the film instead fixated on Al Gore and, strangely, Rachel Carson. It was a transpicuous attempt to distract audience attention from science and focus it on anger toward individuals. Especially in the case of Rachel Carson, an author and scientist whose most famous work was completed 50 years ago, the film squandered valuable time that could have been used exploring pertinent climate change issues.

Singapore (CNN) -- Tim Flannery believes the future peace and stability of the world rides on action at next month's United Nations Climate Change Conference in Copenhagen.

"Really, Copenhagen is really a question between peace and prosperity versus war and chaos," Flannery, chairman of the Copenhagen Climate Council, told delegates at the Asia-Pacific Economic Cooperation CEO Summit on Saturday. "Food security, water security, mass migration and political instability" are at risk if the amount of greenhouse gases in the atmosphere isn't mitigated, he said.

The Dutch really do understand 'stuff' before others. But I feel that do it the complicated way - A Norwegian article on the same reports that the cars will be tracked by GPS. (man!) Why not just put the tax directly onto the petrol cost ?

A state task force will look at equipping every new vehicle in Oregon with a Global Positioning System to record every mile driven and where. Motorists would pay at the gas pump based on how much they drove, no matter how fuel-frugal their vehicle.

The plan still requires legislative endorsement and the full details could take several years to work out, but state analysts said the governor's endorsement is a crucial step toward solving what has become a problem in many states: dependence on a gasoline tax.

"This is a way to try to develop a fair funding mechanism that we're going to have to have if we're going to be aggressive in terms of looking at electric cars and hybrids and plug-ins and all those options, and at the same time continue to invest in our roads and infrastructure," said Rem Nivens, the governor's deputy communications director.

Oregon plans to spend $650 million on transportation projects next year, a smaller version of President-elect Barack Obama's proposal to stimulate the economy with infrastructure spending. Here, it will be financed in part by a 2-cent-a-gallon tax increase.

In the UK we have a mandatory yearly MOT safety test for all cars over 3 years old - part of that test is taking the vehicle mileage, so the state actually does know how many miles each vehicle over 3 years old has done in the last year. IMO that could be a far simpler system than using global positioning for billing per mile purposes. KISS.

The problem is that we don't have a similar setup in the US. Safety inspections, if any, are the responsibility of the state. Since it's easy to cross state borders - it's common for people to live in one state and work in another, for instance - it's hard to tax people on mileage unless you can prove they drove those miles in your state (or country).

I suppose we could set up a national inspection system, with mileage checks at the borders...but that would be a whole new bureaucracy that would have to be built from the ground up. I just don't see it happening right now.

I suspect another reason they like GPS is that it can be pay as you go. Every month, say. People find it a lot easier to pay taxes that way than to be hit with a lump sum at the end of the year.

There are always ways to break the law, the way you propose is one of the most dangerous since, in the UK anyway, you're likely to be caught speeding at the first speed camera.

Actualy the roads are utilised by the the vast majority of the general population in some way, and the UK way of not ring fencing any of our taxes for specific use works quite well. Some of the tax from car use goes to pay for state eductaion since the tax generated by cars is way more than the cost of maintaining the roads.

Sadly our predicament isn't just about oil.

There has to be a simple way of limiting fossil fuel use in general and the only fair way is rationing carbon emissions IMO, since our current rationing by price and taxing gas guzzlers for example has limits, the market is neither free nor fair.

How does simply raising the gasoline tax not accomplish the same thing?

Set the tax high enough to maintain the previous/expected/needed revenue stream from given a national automobile population made up of cars which get similar gas mileage to the Toyota Prius.

Unfair to folks driving cars that don't get the gas mileage of a Prius?

Too bad, too sad...the dual goals of the tax would be to pay for road maintenance (and contribute to the general fund) and provide incentives for folks to buy cars with gas mileage which is equivalent to a Prius(or better).

I've heard plenty of folks say 'put out the right incentives, and the free market will take care of the rest'. Well, wrt to the dual goals of collecting revenue and increasing auto gas mileage in general, the above idea would work just like that.

And if folks can't afford to play, then they ride the bus, rent Zip cars, bicycle, carpool, or do without.

How does simply raising the gasoline tax not accomplish the same thing?

The real purpose of the mileage tax (as envisioned in the US, anyway) is not to discourage driving, nor to encourage fuel efficiency. It's to get money to maintain the highway system. Fuel-efficient cars still cause wear and tear on the roads.

Now, you and I may think the highway system is doomed, or should be, but there is no way mainstream America or our politicians would even consider that. They need money to maintain our roads and bridges. Traditionally, that's been through the fuel tax. People are looking ahead to the future - when most cars are electric or some such thing, and a Prius is a gas-guzzler, if it still exists. How do you get money to maintain the roads and bridges then? That's what the mileage tax is about.

One of the very few highways where heavy trucks are banned is the Natchez Trace Parkway (a linear National Park). A limited access 2 lane highway with some sections built by the WPA in the 1930s. Fairly heavy local auto & pick-up traffic plus tourists.

I have taken it many times over the last 3 1/2 decades and never seen any potholes or road maintenance being done. Once asked a park ranger and he said that "it held up pretty good".

Where the asphalt does get thin (mainly aggregate showing) it does so evenly and not just in two tracks where tires wear. My conclusion is that environmental exposure is oxidizing or washing away the asphalt.

Alan

PS: I am aware that acceleration & braking affect wear on a street (in New Orleans bus stops are poured in concrete while the rest of the road is asphalt), but I am not aware that speed per se increased wear. Cars traveling at 25 mph should create as much wear & tear as those going 50 mph or 80 mph AFAIK. Weight is the primary determinant.

That could well be true, but that doesn't change the fact that roads must be paid for, and they cost money to build and maintain...no matter what vehicles are using them. Even before cars were invented, roads had to be built and maintained. (Much less money was required, of course.)

Interesting. I suppose that's another tack we could take. We actually could build roads that stood up to truck traffic. It would be more expensive and more time-consuming, but it could be done. And it might be argued that, in a peak oil world, trucks are more essential than passenger vehicles.

Roads will always require maintenance. Even if no one uses them, they won't last forever. New York state has some roads where trucks are not allowed, such as the Taconic State Parkway. Until 2000, even pickup trucks were not allowed. Amazingly, they still require maintenance. New York State has spent millions on it.

I spent a half hour with Google (i.e. not an exhaustive search) and found speed to have an effect on bridges and the rate with which speed bumps wear out, but it was not noted as being a factor for wear & tear for general streets and highways. Some interesting information in the new "double wide" heavy truck tires (which reduce truck fuel consumption by 1% to 2% vs. dual tractor trailer tires).

Road maintenance depends a lot on vehicles and tyres. If the proportion of heavy vehicles is big, speed does not affect road maintenance that much. But where there are mainly cars and especially if they have studded tyres the wear on the road is much higher at higher speed.

One section of the Garden State Parkway in NJ used to ban trucks and buses. That section carried an enormous volume of commuter traffic, and IIRC, the reason for banning large vehicles was that "all car" traffic flowed much more smoothly. A side-effect was that the roadway required much less maintenance than sections where trucks were allowed.

As Alan correctly notes elsewhere, damage goes up as the fourth power of the weight increase on an axle (ie, double the weight on the axle, damage goes up by a factor of 16). To the best of my knowledge, no state imposes taxes or fees on large vehicles in proportion to the damage they do to the roads. The usual arguments made by the trucking industry in opposition to proportional taxes/fees is that (a) the costs will simply be passed on to consumers, so general tax revenue should be used instead, or (b) in the case of increased fees, trucking companies will relocate so they can register their vehicles in states with lower fees, costing lots of jobs.

The per mile tax has perverse effects on efficiency. If they are gonna make we pay $x to drive a mile I'm gonna make sure it is in a Hummer. And the guy who drives the same make of vehicle with a featherlight foot probably uses 20-30% less fuel than the heavyfooted driver. I bet the relative wear on the roadway and costs for emergency and policing services probably varies by several times that. So a per mile tax is really a subsidy for gas hogs. Can you imagine making someone with an electric Aptera pay as much as the guy in a Ford Epedition. These sort of things need to be resisted as the evil that they are.

Of course raising the gas tax to cover it has to be made adaptable. Rather than increasing the tax by X per gallon, the size of the tax needs to be automatically adjustable, if less gas is burned than the tax rate goes up next month or next quarter. But our foolish legal and bureaucratic system seems to be uniquely alergic to adaptive policy.

The fuel tax was supposed to be a substitute for taxing vehicles by the damage they do to the roads. Higher weight, higher speed, more distance traveled = more fuel consumed.

But it turns out that a fuel tax puts a disproportionate burden on cars.

I don't see this as that big an issue, because in the end, it's the consumers who pays anyway. At least, it's not worth the increase in complexity actually taxing vehicles by the damage they do to the roads would require. Several states have tried it, and the result was either not worth it because of the expense of monitoring and enforcing it, or mass cheating. Classic Tainter, really.

I don't know about the difficulties of getting it roughly right, but if road construction/maintenence is a big issue, this represents a severe distortion of the market. By that I mean that economic decisions that are far from optimal are being made because the price signals are grossly wrong. Perhaps more axles (or more tires per axle) is an optimal solution. By why would the market provide this, unless the price signal is there.

Probably the biggest obstacle is not technical, but political. Those who are in effect getting a substantial subsidy will raise a huge stink if you try to make them pay.

FHWA officials, as well as representatives from the American Association of
State Highway and Transportation Officials (AASHTO), the Automobile
Association of America, and several states, maintained that heavy
trucks-particularly the approximately 500,000 combination trucks that
have gross weights over 75,000 pounds-continue to pay far less in federal
highway user fees than the costs they impose for highway maintenance
and repair. According to these officials, the current federal highway user
fee structure continues to be inequitable because it does not effectively
capture the two key components of travel that cause highway wear:
severity (the vehicle’s weight per axle) and amount (the miles traveled).

Why do fuel taxes not work for this?

For example,
according to AASHTO, an 80,000-pound, 4-axle truck typically does twice as
much damage per mile as a 50,000-pound, 4axIe truck but uses only
14 percent more fuel. As a result, the heavier truck is undercharged
relative to the damage caused while the lighter truck is overcharged.

According to Ed Tennyson, the increase to the 80,000 lb limit "appeared" in the conference committee reconciliation (between House & Senate) at the last minute without one word of debate, expert testimony, etc.

Simply rolling back the weight limit to 65,000 lb for any highway receiving federal aid would significantly reduce damage and extend road lifespans.

PS: I am aware that acceleration & braking affect wear on a street (in New Orleans bus stops are poured in concrete while the rest of the road is asphalt), but I am not aware that speed per se increased wear. Cars traveling at 25 mph should create as much wear & tear as those going 50 mph or 80 mph AFAIK. Weight is the primary determinant.

Maybe on a smooth surface, I live about 500 meters from a bumpy parkway and I can tell if something is moving fast when it hits a bump -- I can feel it, lots of kinetic energy being transferred up to those bumps. If something fast and heavy hits a bump I hear creaks and pops in my house.

Yes, road surface can make a difference with dynamic loads. I once saw an elevated highway where a "ramp effect" at a rough joint was vaulting vehicles ever so slightly airborne. The thump when they landed ended up collapsing that section. It only fell a few inches, but the highway had to be closed while repairs were made.

Another issue is "pavement polishing." The friction between the tires and the pavement makes the surface so smooth that skidding becomes a problem. This most often happens on high-speed curves. The fix is resurfacing, or sometimes "gnurling" - they grind grooves into the pavement to make it rougher.

This is one reason I find the idea of a solar-panel road utterly ridiculous. Yes, I know, they say the glass surface of the road will be textured so cars don't skid. But how long is that going to last?

(The other reason I find it ridiculous is water. Water is extremely destructive, and anyone who can find a way to seal joints to keep it out of roads and bridges and patent it will never have to work again. Good luck trying to keep it out of a road that's basically a glass box of electronics.)

While I agree that the idea of paving roads with PV is a bad idea, there's still the overhead option. Adding PV covered roofs over the freeways would also make it possible to catch the rain/snow before it hits the pavement. This would vastly reduce the wear from rain and make it possible to forgo the use of salt on the roads during the winter. Winter commuting would be much safer as well.

You can send my gazillion bucks for this great "new" idea thru PayPal to my e-mail address...

The problem is that it's wicked expensive to build roofs over the roads (never mind solar-panel roofs).

The solar road people seem to be arguing that solar-panel roads will be cost-competitive with regular roads because they'll last longer. I think they're deluding themselves. As originally conceived, our highways were supposed to last for 20 or 30 or 40 years, too. Reality proved recalcitrant, as it often does.

The M6 Toll road round the North end of Birmingham in the UK gives a pointer to the real financial relative cost of HGVs (heavy trucks) as opposed to lighter vehicles, in terms of road wear.

The M6 Toll is the UK's first privately constructed, maintained and operated motorway. Up to its construction all motorways in the UK were constructed, maintained and operated by the government using tax revenues, and did not attract tolls except in the case of some tunnels and bridges.

When the M6 Toll was opened in c.2003 the price charged for an HGV was set slightly too high to make it economic for HGVs to use it. This is believed to have been a deliberate policy on behalf of the operators of the M6 toll. One can assume that they did their sums and decided that it was more profitable to discourage HGVs from using their shiny new road than collecting their tolls.

The original reason for constructing the M6 toll was to relieve the older M6 through Birmingham, which was grossly overloaded with both cars and HGVs. The older M6 nowadays still has a large number of HGVs using it. They can clearly be seen from the train below! They can't all be moving around within Birmingham itself, so one can only assume that they are still avoiding the M6 toll.

Interestingly, the M6 toll operators appear to want to discourage motorcyclists as well, charging them a fee when most other toll operators in the UK don't.

If the future fleet were to be very efficient gasoline/diesel-fueled vehicles, I would still submit that raising the per-gallon tax could normalize the revenue. If the vehicle fleet today gets an average of 'x' MPG and we pay 'Y' amount of taxes per gallon, and the vehicle fleet 10 years in the future gets '2x' MPG...then the government charges '2Y' amount of money per gallon, and everything is even.

However, I can see that all-electric vehicles upset that applecart.

One potential fix would be to require specially metered outlets at stations, at homes, and at businesses, which would charge the customer the desired amount of tax per unit of electrical energy. The EVs on-board computer could participate and talk to the utility's computers and authenticate that the electricity drawn was being put into an EV battery.

Of course a per-unit of distance tax would work as well...were it not for the high likelihood that most Americans would be vehemently against Big Brother potentially monitoring and tracking how much, where, when, and how fast they drive. The protests would dwarf anything seen to-date, and I would be in the protesting camp on this.

I would not personally mind a method which purely tracks mileage (maybe downloaded once per year somehow)...but I think an on-board near-real-time GPS tracking contraption opens he doors to too much loss of privacy.

I agree, it's creepy. There have already been cases where people lost their jobs or their divorce cases based on what their EZ-Pass showed about their movements. But it doesn't stop people from using EZ-Pass.

Personally, I think it will be difficult if not impossible to impose a big new tax like a mileage tax in the current environment.

It's interesting to look back on how the gas tax was passed. It was of course opposed by many, including farmers and Big Oil. But it seemed like such a small amount, and gas prices were dropping rapidly at the time, due to new technology, so it didn't seem particularly onerous. But probably the biggest factor was that people genuinely wanted highways - including the farmers.

I'm not sure it's possible to get that kind of support today. We've already had some fairly dramatic infrastructure failures, but people still aren't exactly clamoring for more transportation funding.

Use of the EZ-Pass and similar devices is no longer voluntary. If you're not a very-occasional visitor traveling in the wee hours, it's likely to be forced in at least two ways, depending on time and location, and it's likely to be "encouraged" in a third way:

1. Gargantuan lines in the cash lanes - there simply aren't that many hours in the day. The Illinois tollway built huge side-lanes in which to store endlessly waiting out-of-town drivers and their cars.

2. Huge charges for paying cash - the Illinois tollway charges double. For any sort of regular user - the person perhaps most likely to suffer adverse consequences of 24/7/365 snooping - that adds up to real money in a hurry.

3. Persnickety demands for "exact change" in coins only and in decidedly non-round amounts. This is not so much coercive as just icing on the cake, designed to get the point across.

And GPS tracking, of course, is a whole lot more comprehensive. What's really creepy is people's blind trust in power-mad government.

Ah, yes...the 40 cent tolls in Illinois. Conveniently located every three miles. I have fond memories of desperately searching my car for exactly One quarter, One nickel and One dime, every five minutes as angry commuters honked behind me.

Netherland is a small country and raising tax will just make people fueling their car in Belgium or Germany, resulting in tax loses...
On the other hand, I wonder if it will be legal for Netherland to tax people for their travel outside their country. Most Dutch travel a lot out of Netherland and in summer the go to South France, Spain or Italy...
Note that the propose system offer people buying such equipped car a 25% discount on the car price (no tax). On a 20,000 euro car, its a 5,000 euro discount...pretty good. And driving 20,000 km a year (quite a lot for Europe) would be 600 euro of tax a year, so the car owner will save money on the car for over 9 years.

And driving 20,000 km a year (quite a lot for Europe) would be 600 euro of tax a year, so the car owner will save money on the car for over 9 years.

Given the time value of money that would probably hold for the lifetime of the vehicle. Think of this as banking the 5000 euro in a high interest savings account, and paying the tax with the interest/principal, it will take much longer than nine years to drain the account.

In the UK congestion charging is done by registration plate recognition cameras, if you don't pay the zone entry charge by midnight you get a hefty fine many times the congestion charge - the same cameras are also used to fine speeding drivers since there is a minimum time between two cameras on the same stretch of road to be within the law.

Keep in mind what this will do to the tens of millions of people who live at or near the poverty level. They will never be buying a Prius, most can't even afford a cheap new car. There are many poor working Americans who live far from their jobs because they can't afford the housing prices in the areas close to their jobs. A mileage tax would be a huge problem for them.

A common theme throughout TOD discussions is forgetting about the working poor when we talk about transportation solutions. We tend to focus on technology. But without looking at what people can afford, we sometimes underestimate what technology can accomplish. Gas tax increases and mileage taxes hit the poor extremely hard. They won't be the people who benefit from new technology like Hybrids and Electric Vehicles that substantially reduce fuel expense. They will continue to drive the older generation vehicles for years to come.

Unfortunately, because of the greed of the super rich, this segment of the population is growing larger every year. The thought of the poor being further taxed so those with a Mercedes can have a smoother ride, galls me. (No offense to those who own a Mercedes who are good people, you know who you are:)

I hate to say it, because I was in the transportation industry, but a mileage tax should be restricted to vehicles with a GVWR (total vehicle, passenger and cargo weight) of over 10,000 pounds. That tax should go up on a log scale to account for the rate of damage caused by increasingly heavier vehicles. This is already done with annual registration fees, but, in my opinion, the rate of fee increase is not fast enough. We should also have a purchase tax on vehicles that is not a fixed percentage. The higher the vehicle price, the higher the tax rate.

A common theme throughout TOD discussions is forgetting about the working poor when we talk about transportation solutions.

There is an easy obvious solution for that. Target some or all of the new revenue to tax relief for the poor (if they don't pay taxes because they don't make enough, give it to them in cash). Of course this is anthema to the free market ideologues, but the progressivity/regressivity of the entire system can and should be adjusted, not the progressivity/regressivity of the individual pieces.

For instance, it would be a big improvement if we cut federal income taxes -especially on the lower incomes, and made up for the revenue with a carbon tax. Because it would reduce our import oil bill, a revenue neutral change like that would make the nation richer. The only thing preventing such logical choices like this are ideological rigidity.

Rapidly/explosively expanding mass transit, especially rail based, would help many. For others, dislocation will be the price to be paid.

On the streetcar, talked with a tourist who works in a dental office and commutes 40 miles each way to her job in central Massachusetts. Economically car, minimal traffic make it practical from her POV.

Post-Peak Oil, a dentist may be able to afford such a commute, at least for a few years, but not those below that income level, a new job or new home will be required.

Post-Peak Oil, many will suffer, but the Suburban/Exurban working poor most of all (as a group).

Reality.

Subsidizing dental assistants in their 40 mile commutes will not be good public policy.

I think there's a reason they do it the hard way. Part if it is that electric cars will still need streets and roads; God forbid, I suppose, that those be provided simply as part of government's public-service role. But the real point is for power-mad politicians and regulators to dictate where you may travel, when you may travel, what route you may take, and by implication for what purpose you may travel. They've always wanted to micromanage people's lives simply for the sheer joy of bullying; historically they have long done so crudely by curfews, sumptuary laws, or lately by closing train lines taking people to political rallies they didn't approve of. But GPS and computers take it to a whole new level of detail and make it incredibly cheap and easy compared to the old ways.

Possibly I just know too many people who once lived in Communist countries, but I find this blind trust in ever more intrusive and snooping government to be positively creepy. But at least Americans have the excuse that it has not gotten them into truly deep trouble lately, and people do tend to (falsely) assume that past results guarantee future results. In Europeans, on the other hand, I find it absolutely inexcusable, just given nothing more than the number of horrid wars that it has enabled over the years and the centuries. It's especially disturbing to find the Dutch embracing it, when they ought to know better by way of having been at the business end of a number of those awful wars started by runaway governments.

The film, Not Evil, Just Wrong sounds like it's just another blast of carefully scripted disinformation from the professional denialist camp.

Unfortunately, these guys know only too well that a lie repeated often enough becomes the accepted truth. Sort of like the Fundamentalist Christians, who keep repeating the unscientific facts straight out of the Bible, in hopes that their kids will absorb their message instead of the scientific findings of geology, evolutionary biology and genetics. I wonder if these folks will someday find that they have been branded as the new Taliban and put on watch lists for their misdeeds. They are just like that guy in Texas who practiced polygamy with several underage girls, that is to say, they are "abusing" children with their propaganda...

Even though we’re believers, not skeptics, our denial is far more insidious and subtle. So subtle, in fact, that we’ve managed to convince ourselves that we’re not in denial at all. Quite the opposite. Why, the thought is too absurd even to contemplate.

But it’s true.

We’re deniers every time we say “80 percent by 2050,” or even “80 percent by 2020”; every time we refer to tipping points in the future tense; every time we advocate substituting “clean” energy for “dirty” energy; every time we buy a squiggly light bulb or a hybrid vehicle; every time we advocate for cap-and-trade, or even a carbon tax; every time we countenance the mention of loopy geoengineering schemes; every time we invoke the future of our children and grandchildren and ignore the widespread suffering from global climate disruption today.

I've pretty much given up on Grist. I planted not a few comments to this effect on their various blogs and got lots of push back. They really do believe they can save the world from global warming and we can get on with a prosperous life using alternative energies.

Chinese state media say some of the snow was induced through cloud seeding, although the precise amount of snowfall in all areas was not reported and it wasn't clear what the previous records were...

...More than 7.5 million people have been stranded or otherwise affected by the storms, which caused the collapse of more than 9,000 buildings, damaged 470,000 acres (190,000 hectares) of crops, and forced the evacuation of 158,000 people, the ministry said.

Trust in our government, financial, corporate, media, and religious leaders have never been lower. We are entering Phase 2 of this Crisis period. When the foolish self-serving actions taken by the government in the last year fail to revive our economy and the inevitable stock market crash and deepening depression take hold, Americans will become more disillusioned, angry and looking for someone to hold responsible.

Parsing the link, I would say some of it is interesting, but not exactly neutral in its politics.

Firstly, "Financial Sense" is not exactly a neutral source. The writer is for an unfettered "free market" in principle, and I don't agree with that. I think runaway deregulation is one of the causes of our current financial problems. Having grown up outside of the US, I feel a bit less propagandized by the 2-party system than most, and I tune out when I read words that try to demonize the "other side" as to blame.

Lack of Trust, accompanied by the spreading of wild conspiracies, is often a propaganda weapon by whichever party is not in power at any one given moment, and many of the opponents of the current administration have no trouble stirring it up for their own benefit.

However, some of the commentary on psyche seems accurate, and worth noting.

You state that runaway deregulation is a problem, and in the same post you identify "Lack of Trust" as a problem. Lack of Trust in whom exactly-Bernie madoff? Cox (SEC), Paulson,Greenspan,Bernanke,Geithner? I don't want to speak for you, but are you saying that everybody that can call Obama on the phone easily is a crook, except Barack? Who exactly do you want the bewildered Americans to put their trust in?

These are the issues I think we need to be working on, knowing what I know about our current predicament :-

1. Regulating carbon emissions, in order to prevent us cooking the planet
2. Implementing conservation programs which will help us deal with peak oil, and lack of drinking water
3. Encouraging development of renewables (even though I don't think they will adequately replace fossil fuels)
4. Encouraging more mass transit, including rail systems, and support for localization
5. Dealing with overpopulation

Based on those 5 items, I have to put my trust in leaders who will accomplish those goals. Of course, 5 out of 5 would be great, but for where we are, I'd settle for 3 out of 5, as a start.

I'm sure other people have vastly different goals, based on their current understanding of the world's problems (if they care), the country's problems, and their own problems - maybe jobs are at the top of their list, or the cost of healthcare, or food prices, or bailing out banks, or not.

Frankly, IMHO, if we can't preserve the climate and the biosphere at some reasonable level, anything else we do will turn out to be a waste of time, money and resources.

The writer is for an unfettered "free market" in principle, and I don't agree with that. I think runaway deregulation is one of the causes of our current financial problems.

Wholly agreed on that one. I think the real problem is our tendency to think in a polar way. The extreme of 100%collective 0%private economy was a huge disaster (communism), therefore the opposite extreme 100% private and absolutely no collective component is the only way. I've always thought that a good rule of thumb is moderation in all things unless there is a compelling argument otherwise. This would be an argument for a mixed economy. But our tendency to go for purity of thought militates against that. And the formation of political parties has a natural polarizing effect as well, for the party on the right members who want to adavnce have to demonstrate their 'rightness'. So naturally over time the tendency is for this groups to migrate toward opposite poles. This tendency is absolutely harmful. That fact, and awareness of the dynamic, and how it can be harmful needs to be taught. But, instead we simply choose up sides and start fighting with the other side.

Aside from actually not focusing upon the Fourth Turning which is central to the editorial, you run off into a nether land of free markets. It's dinner time. Have fun. You will be both roadkill when it comes down.

Scientific literacy has been measured in the U.S. and compared with similar measurements in other developed countries. The U.S. comes in far down the list on the basics.

Here's the results of the NSF survey back in 2002:

6% of all Americans don't know/believe that Cigarette smoking causes cancer.
13% of all americans don't know/believe that plants create the oxygen in the air.
20% of all americans don't know/believe the center of the earth is hot.
21% of all Americans don't know/believe that continents move.
24% of all americans believe that all radioactivity is man made
24% of all Americans believe that sound travels faster than light.
25% of all americans believe that the sun goes around the earth.
35% of all Americans don't know/believe it is the father who decides the sex of a child.
35% of all Americans believe that radioactive milk can be made safe by boiling it.
46% of all americans don't know/believe the earth goes around the sun once a year.
47% of all Americans don't know/believe that human's evolved from earlier organisms.
49% of all Americans believe that Antibiotics kill viruses.
52% of all Americans believe that electrons are larger than atoms.
52% of all Americans think that people coexisted with dinosarus.
55% of all Americans believe that lasers work by focusing sound waves.
55% of all Americans can't describe what DNA is.
67% of all Americans don't know/believe the universe began with a huge explosion.
78% of all Americans can't describe what a molecule is.

Black Dog - I get your point and am not doubting it but these sort of surveys should be taken with a pinch of salt. If someone with a clip board stopped me in the street and asked me the same questions I - being the playful cad that I am! - would take the p!ss and answer that humans did indeed live with those lovely fluffy din-o-saws. Just to have a laugh.

During the last UK census I stated that I was a member of the Jedi religion (as a protest - why should the bloody government need to know my religion?). Lots of people turned out to be Jedis too! And the next census we hope to get enough confirmed Jedis registered to be officially recognised as a bonefide religion and thus have the protection of religious equality laws. Then we can all force our employers to allow us time off work to celebrate Obi-Wan day!

You obviously didn't grow up in Lake Wobegone "where all the children are above average".

Now I would probably mess up the test by being too literally correct:

Plants didn't create the surplus of Oxygen in our atmosphere. Dissociation of water vapor into hydrogen and oxyegen, with the hydrogen being easily lost to space did most of the work.

The father doesn't decide the kids sex. The race of the sperm for the egg chooses that. The father only donates the sperm, he has no influence over which one wins the race.

The earth doesn't go around the sun once per year. The actual length of the year slightly differs from the orbital period due to precession.

Some antibiotics kill some viruses, even if generally they target bacteria.

Electrons are larger than atoms! The size of a particle is inversely proportional to its mass, and electrons are thousands of times lighter than atoms.

Depneding on the definition of dinosaur, we are currently living with them (birds, crocodiles, Komodo dragons, Gila monsters).

The universe didn't begin with an explosion. Space and the stuff that fills it were both created simultaneously. There was no exploding of stuff into space. The stuff in space simply expanded along with the space.

A molecule is not a simple thing. Why exactly do two or more atoms hang out with each other? Any halfway decent answer would take several PhD thesis.

So, if one is a stickler for accuracy, many of these questions could be shown to be badly posed.

I am reminded of an old movie title; Never Steal Anything Small. The motto of OPEC oil producers seems to be; Never Tell a Small Lie. It is likely that even seven million barrels per day is way over the top. In fact it is doubtful that Iraq will ever exceed its 1979 peak of 3,477,000 barrels per day. It all depends on those massive undiscovered oil fields in Iraq's Western Desert.

On 18 April 2007, the US energy consultancy IHS issued a press release stating that up to 100bn barrels of oil resources remained to be discovered in the Western Desert of Iraq...

This conclusion stands in stark contrast to the 2004 study by the US Geological Survey (USGS) and GeoDesign (a consultancy that specializes in Iraq’s petroleum geology) that estimated the undiscovered oil resources of Iraq’s Western Desert to total only 0.5bn barrels at the 95% level of probability, and 1.6bn barrels at the 50% level of probability...

The USGS-Geodesign study concluded that the undiscovered crude oil resources of all of Iraq, including the Western Desert, may only total 13.2bn barrels at the 95% level of probability, and 45.1bn barrels at the 50% level of probability. They did not consider Iraq’s undiscovered resources to exceed 84.1bn barrels even at the 5% level of probability. These total estimates fall far short of the IHS conclusions for just the Western Desert of Iraq.

A few small pockets of oil and gas were found in the Northwestern Desert of Saudi Arabia, directly adjacent of Iraq's Western Desert but apparently Aramco deemed them so small that the investment required to produce the oil would be too great to fool with. But the point is, that area directly adjacent to Iraq's Western Desert has been throughly explored and almost nothing found.

And then we have the 4.0 mbpd of surplus "capacity," as described in the article linked uptop about Saudi Arabia playing hardball with Iran. Following is an article about OPEC increasing the oil price band:

However, the Saudi oil minister, Ali al-Naimi, immediately moved to play down the likelihood of such a move. Saudi Arabia, the most powerful country in Opec as it is the world's biggest oil producer, made clear that it would oppose the idea. Some commentators detected pressure on the Saudis from the US to keep oil price inflation down.

Mr Al-Naimi said: "Saudi Arabia continues to be committed to OPEC's . . . price band. There are signs that worldwide inventories have begun to build but no one really knows for sure. I do not believe there is a fissure [within Opec]. There is dialogue. Opec in general is committed to the band," he said.

Of course, this was from 2004, when they were talking about a $22-$28 price band. And in fact, Saudi Arabia made good on their promise to increase net exports, in an attempt bring down oil prices, hitting an annual net export rate of 9.1 mbpd in the following year, 2005. But what gets me is that virtually no one in the MSM wants to discuss why Saudi Arabia was able to increase their net exports from 2002 to 2005, in response to rising oil prices, while they were unable to increase their net exports from 2005 to 2008, in response to rising oil prices.

OPEC: We think prices at US$70-US$80 are fair.
Means: OPEC will not increase oil production until oil trades above US$90 per barrel. OPEC members' target is US$70-$80, which means OPEC will increase production when oil trades above this range (perhaps to US$85-$95) to allow for some slippage. OPEC members do not want to encourage consumer efficiency or risk another recession with US$100+ oil, which is a psychologically important level for oil consumers.

One little one I didn't include was Possum Living - How to Live Well without a Job and With (Almost) No Money by Dolly Reed, 66 pages printed out, ISBN 0-87663-987-2. This is a free e-book that can be downloaded from http://www.f4.ca/text/possumliving.htm I didn't recheck the URl and I printed out my copy in 2005. If it's no longer good, Google the title.

I didn't include it because what it really is an EELP, book. It is a great read with lots of useful information but didn't fit the format as a prep book. Many good ideas.

The emphasis at TOD and many of these books is on the problems associated with peak oil (and peak fossil fuel energy). Understandably, it is the dynamics of raw energy extraction that is most easily seen, with data to back it up.

Unfortunately, PO may not be the canary in the mine phenomenon that many people expect. The reason is that it isn't raw energy that drives our economy, but the net energy available. The gross energy is what we pump and dig. But to do that pumping and digging a tremendous amount of previously extracted energy needs to be reinvested in the process. These energy costs have to be subtracted from the gross in order to find the net that is available to do the economic work that produces our total assets.

My research, while at SUNY-ESF, has been focused on building a new dynamic model of what I am calling an 'abstract' economy. Like Jay Forrester's and the Meadows' models it attempts to look at the dynamic interactions of elements of economic interest. However, my model, with collaboration from Charlie Hall (EROI guru) starts with the strict energetics (i.e. it is the flow of energy that produces economic activity) and esp. of a system chiefly run on fixed, finite fossil fuel resources. A major finding that we will be reporting in a forthcoming paper is that net energy peaks long before gross energy. In other words, the peak production of oil and other fuels may mean that the peak of energy available to do useful work has already come and gone. If that is true, we are interested in what role that has played in our current economic situation globally.

So, while books continue to warn of the problems associated with peak oil, we are starting to believe the implications of an early peaking of net energy may mean it is already too late. Declining net energy means less work can be done in the future. Less work, fewer assets produced. We may already be in irreversible decline unless what net energy remains available is directed toward adapting to a world with much less fossil fuel resources.

THIS REPORT IS INTENDED as a non-technical examination of a basic question: Can any combination of known energy sources successfully supply society’s energy needs at least up to the year 2100? ...

...And contrary to the hopes of many, there is no clear practical scenario by which we can replace the energy from today’s conventional sources with sufficient energy from alternative sources to sustain industrial society at its present scale of operations.

George;
Do you know if Charlie Hall or his students have done any EROEI analysis on low-tech Renewables, in particular Homebuilt Hot Air and Hot Water collectors, using recycled source material?

I've done some searches for a helpful analysis of these from time to time, but still have not seen anything worth saving. A couple of the more wiggly numbers in such an analysis, yet ones that give it a potential for having a very positive EROEI number on them, are the aspect of Labor, which if done by a homeowner and family can share that input with the necessary duties of housekeeping, hobby-time and general self-improvement, and thus be getting multiple birds with one stone.. and the benefits of using recycled material that has already 'Returned some of its effective Embedded Energy' in it's initial uses.

In some cases, the cast-off materials are already part of an energy-improvement scheme, such as the scads of Storm-windows that are being removed from older homes as people refit with modern windows. This use of the perfectly good glass, and in some cases the aluminum framework as well, not only saves on having to procure such materials for a DIY heating project, but also on the costs of disposing/trucking/storing/smelting/reforming out these already very useful and durable products for some other recycled purpose.

I haven't tried to calculate such figures myself, if I can find a way to similarly reuse those numbers that a good researcher has already generated.. for much the same reasons as the above!

I can ask around, but thus far I would guess no such analysis has been done. Charlie and company struggle mightily with fossil fuels and more commercial-types of alternatives. You might want to contact David Murphy, Charlie's PhD student (who should be congratulated for passing his comps!) and also known here as EROI-Guy. I think he would know if any of Charlie's other students have looked at anything like that.

The dynamics of the crops market may be about to return to those which sparked the 2008 price spike, K+S has said, warning of the potential for the biggest production deficit in 30 years.

Assumptions that production will remain high next year "could rapidly prove to be too optimistic" given the help from good weather in boosting harvests in 2009, and the potential for lower prices to prompt farmers to cut sowings.

Even assuming a return to average plantings and yields, and typical growth in demand, global crop production would be set for "the largest shortfall registered in the last 30 years", the fertilizer group said.

This would cause a "corresponding sharp fall" in grain stocks.

Some further recent snippets:

US corn and soybean condition falls to 2009 low
America's corn and soybeans are showing signs of suffering from being left late in the field by a rain-delayed harvest, with the quality of both crops falling to its lowest level this season.

Poor crop may prompt Brazil to ditch wheat levy
Brazil is said to be considering moves to encourage wheat imports from beyond neighbouring states [normally imports from Argentina], after rain and disease damage its own crop

Argentina wheat harvest plunges on drought, locusts
Wheat output in Argentina’s biggest producing region will plunge 70 percent in the current harvest because of dry weather and locust swarms, an analyst at a local cereals exchange said.

EU grain sowings to fall by 1m hectares
A second successive year of lower plantings will take them below 57m hectares, with barley leading the decline, Strategie Grains says

True, there is an extra 60-70 million mouths to feed every year or circa 178,000 extra per day. But also there is a creeping failure due to financial, energy and climate chaos stressing production plus the internal dynamics of the agricultural system.

I was talking to a local farmer today, he's lost 50% of his cattle to Blue Tongue. His brother-in-law is struggling with feral colza (rapeseed) which is currently flowering in his fields and has become resistant to herbicides. In the UK there is talk of struggling suppliers going under in January leading to cost increases for UK consumers as over supply is eradicated and the true cost of the falling pound becomes apparent.

I saw a map of the US today (can't remember where) marked with counties declared agricultural disaster areas. It seemed that about 60-70% of the map was covered with the affected areas. I would say 2010 is going to be an interesting year when reality further intrudes into peoples daydreams.

HAcland and Burgundy - You are both correct.There has been a massive overshoot in population and the resources just aren't there to feed them.In addition, resources are diminishing due to environmental degradation.

The slide in agriculture's fortunes, following a slide in crop prices and demand for meat amid the recession, was also reflected in lower rates of farm loan repayments and rising demands for new borrowing.

Bankers surveyed for the report "reported weaker farm incomes due to sagging protein demand and a summer decline in crop prices", the office said.

Thanks. It looks like another piece of the credit market is contracting. I bet tight lending criteria is playing a role.

The Farm Credit System said that growth in its loan book slowed to $763m in the July-to-September quarter, from $15.2bn a year before.

The organisation, America's federally-backed rural lending network, said that the slowdown reflected diminished demand for loans, "due to the decline in commodity prices", as well as tight lending criteria.

"In light of the current economic conditions, [lenders] have carefully managed their loan growth in order to maintain conservative capital ratios," the system said.

The slowdown comes amid a tightening of farm budgets which has prompted huge cuts in profits at suppliers such as machinery groups and fertilizer companies.

Since most american farmers borrow the money to plant crops most years, this means that this winter and next summers harvests will be massively lower. Then food prices will spike very high, and the surviving farmers will do very well in a few years.

It is hard to imagine what a bank would do with say 25% of iowa farm land in forecloser. I guess the land would just grow weeds (natural vegetation), and deer hunting would be great the next year.

On the other hand there are various forecasting graphs on TOD by Khebab, Ace etc, which show a decline of several percent from now on. Even Fatih Birol was saying six(?) percent decline when Monbiot interviewed him a year ago.

Is there a divergence of views here and if so who's right (if any)? Thnx.

I think we need to look at the assumptions of the Aleklett/Hook, My guess is that they were trying to be "conservative" (on the high side), so as not to be accused of being alarmist.

The ones we have run on The Oil Drum were trying to use more reasonable assumptions.

Edit:

I checked, and the Aleklett/Hook estimate doesn't look like it is supposed to be a realistic one. It is more an upper bound--taking some pieces of the 2008 IEA report which are likely overstated, and incorporating them at full value, or close to full value. It is only the blue piece in the graph below that they have really looked at.

On looking more closely at these charts it looks like they are not that far apart as may seem. It's easy (for duffers such as me) to get misled by non-zero baselines and differing timescales. At 2012 the TOD charts are close to the Aleklett/Hook; by 2030 A/H are substantially 'optimistic' at 55mbd against 40-45mbd for the megaprojects forecast.

HAcland's comment above is partly correct. It is only the top two layers in A/H that differentiate if I understand it correctly.

And the A/H graph published in the Guardian thus has the decline comfortingly leveled out by adding NGL and non-conventional on top.

I can't think what sound reasoning leads A/H to think the decline will slow between 2015 and 2030. My own expectation would be increasing inefficiencies and disruptions (not to mention economic collapse for various reasons) leading to accelerating decline instead. But I can't find any discussion of how they arrived at their forecast, not on the aspo site (of which Aleklett and Hook are after all the bosses!). Perhaps we could ask them.... (hopefully I'll find the time myself).
[edit: aha, got your update; looks like that explains much, thanks.]

This is a link to the Aleklett, Hook, et al report. The abstract says:

The assessment of future global oil production presented in the IEA‟s World Energy Outlook 2008 (WEO 2008) is divided into 6 fractions; four relate to crude oil, one to non-conventional oil and the final fraction is natural-gas-liquids (NGL). Using the production parameter, depletion-rate-of-recoverable-resources, we have analyzed the four crude oil fractions and found that the 75 Mb/d of crude oil production forecast for the year 2030 appears significantly overstated, and is more likely to be in the region of 55 Mb/d. Moreover, analysis of the other fractions strongly suggests lower than expected production levels. In total, our analysis points to a world oil supply in 2030 of 75 Mb/d, some 26 Mb/d lower than the IEA predicts.

The connection between economic growth and energy use is fundamental in the IEA‟s present modelling approach. Since our forecast sees little chance of a significant increase in global oil production, our findings suggest that the "policy makers, investors and end users" to whom WEO 2008 is addressed should rethink their future plans for economic growth. The fact that global oil production has very probably passed its maximum implies that we have reached the Peak of the Oil Age.

So according to the abstract, they analyzed a particular piece of what the EIA was looking at (the part that theoretically shuold be most accurate), and have come to the conclusion that instead of being 75Mb/d in 2030, it should be 55 Mb/d. The question is how much the part they didn't analyze (amounting to 20Mb/d in 2030) is overstated. Also, they don't consider demand at all. A credit unwind could result in fairly different numbers, I would think.

It seems that the two slivers with 'Yet to be' in them are supposed to be viewed in the light of 'These Checks are still in the mail' .. though I'd think this point would have been emphasized a bit. Of course the slivers for EOR and Non-Conventional might have an asterisk with their presumed growth as well.

I'm sure noone missed the 'MC LYNCH' comment below..

"In point of fact, although Aleklett is well-meaning, he is not an expert on oil supply or forecasting. His work is not scientific, it is statistical in nature, and there is no strong evidence that it will perform any better than that of his colleagues who have been issuing false warnings for two decades. Having written on oil supply for over three decades, I can say that many efforts have been made to forecast oil supply with a variety of methods and they have typically done very poorly. Having advised the IEA (among others), there is no doubt that some there are concerned about oil supply, but usually out of ignorance."

.. Predictably catty, but I'm sorry to see the childish and churlish tone that his detractors took in responding to him. That only makes our argument get conflated with Angry Teens, and 'Oh, that silly internet. You can't take anything seriously there!'

-In matters of tone, you've got to keep it cool. Hollering on the internet just makes you seem silly and ignorable.

Jok, I agree about the unfortunate character of the responses to MC Lynch. But his own comment was quite pathetic itself in that he merely made cheap knocks at their supposed lack of competence rather than present any alternative expert reanalysis or critique himself.

Lynch and the other happy denizens of Fantasy Island, when not cavorting with elves and unicorns, agree that:

Discrete oil wells peak and decline.

Discrete oil fields--the sum of the output of discrete oil wells--peak and decline.

Discrete oil regions (or at least some regions)--the sum of the output of discrete oil fields--peak and decline.

But here is the problem:

They disagree that the world--the sum of the output of discrete regions--will peak and decline.

As I have previously described, when I confronted Lynch with the reality of the Texas & North Sea declines, he adopted the "They don't exist" defense, i.e., he simply asserted that he would not choose to drill in these two regions (which accounted for about 9% of total cumulative oil production through 2005).

I would assert that if production peaks occurred in Texas & the North Sea--two regions developed by private companies, using the best available technology, with virtually no restrictions on drilling-- then peaks can happen anywhere, but then I don't live on Fantasy Island.

The depletion rate was the whole gist of the Uppsala report. This report explains that it would be difficult for new fields to have a higher depletion rate than that seen in the North Sea, and views the North Sea rate as an upper limit for other fields. Using this upper limit, Aleklett/Hook simply modified the IEA graph to come up with the one above.

I'd like to see CERA or anyone else justify a higher depletion rate than Aleklett/Hook. If they can't, they really don't have much ammunition to refute the Uppsala report.

Yes, it's about depletion rates, to quote (Aleklett et al "The Peak of the Oil Age"):

"In WEO 2008, the IEA obtains a very differentpicture using the same data. Can we explain this difference in outlook? We have shown that the IEA‟s estimates for future production from fields currently in production are acceptable. We have also accepted their estimates for the volumes of oil in fields yet to be developed and yet to be discovered. Finally, we accept their estimate for additions from EOR as being realistic. The difference thus lies in one parameter only and that is the depletion rates of remaining recoverable
resources ( ). The future production that IEA proposes assumes unrealistically high ( ) -values."

After about 9 inches of rain in the 5 weeks ending around November 1st, we have had a couple of weeks without rain. It has done wonders for the crop dry down. I finally got the soybeans in except for the very wet spots that I don't dare take the combine into. I'll wait for them to freeze.

I started combining corn yesterday when it tested 16-17 percent moisture. When I tested it at the end of October after the rain stopped it was around 27 to 28 percent. It has to be under 15 to keep and not get docked at the elevator. But with temperatures near freezing 16-17 percent corn will keep nicely until warm weather in the spring when it can be dried down the rest of the way with fans only.

I no longer use propane at all and don't even have a drier, just bin fans. A lot of farmers around here don't dry with propane. With the weather patterns of recent years and new hybrids that dry down better, it is usually easy to manage.

But this year North Iowa received the most October rain in 124 years of record keeping. My place has a (Canadian?) natural gas pipe line about a mile away that goes to the Ventura terminal, but I'm not hooked up to it. A big farmer neighbor is though, and he uses natural gas to dry his corn.

Many farmers just haul the wet corn to the elevator and take the drying charge which can be 50 cents or more per bushel. The elevators around here use natural gas and run the dryers 24/7 during harvest. They can do about 25,000 per day if I'm not misstaken.

Those that panic and dry with propane usually are big farmers who are under pressure either financial or time wise to get the crop in since they farm so much land. It is a case of dis-economies of scale. The small farmer can wait for a change in the weather and still get the work done. And most are not overextended with fancy machinery, high land rent, or land purchases at high prices.

On some of the warmer & drier days this fall, shouldn't you be able to use the fans to dry some of your crop and not have to wait till spring ?

Best Hopes for a Decent Crop,

Alan

PS: I assume ethanol plants will take corn that feedlots, chicken farms, etc. would reject, thereby creating a larger market for spoiled corn. Post-Katrina, local sugar processors and refineries sold their spoiled sugar (at various stages) to ethanol plants.

PS: I assume ethanol plants will take corn that feedlots, chicken farms, etc. would reject, thereby creating a larger market for spoiled corn. Post-Katrina, local sugar processors and refineries sold their spoiled sugar (at various stages) to ethanol plants.

And for this reason even if you think ethanol from edible crops is a serious mistake, ethanol from agricultural waste sounds like a very good idea.

I figured it was past time to confront on its own terms that third inevitable, after death and taxes, which was heat. Rising dry heat was sucking moisture from soils everywhere. Drylands stretched across two-fifths of the planet’s surface, holding the rural third of earth’s population; the rest of us already felt the warm breath that melted away the storehouses of snow and ice, inhaled anemic rivers, and evaporated the drinking water reservoirs that supplied Sydney, Mexico City, Jerusalem, Beijing, Tehran or New Delhi. I could run away, somewhere, anywhere. But hot dry air would follow and catch up. There was, as far as scientists could see, no escape.

As a son of the desert I can proclaim that James Workman really hits the high notes. I'm going out this evening to buy his book.

In 1998 I was living in Las Vegas and a friend who had a ski boat asked me if I wanted to go to Lake Mead. I had grown up in Vegas and when I was 10 my father bought an outboard motor-boat. By the time I was 16 I knew Lake Mead (the largest man made lake in the world) like the back of my hand. I hadn't seen the lake in 20 years and I accepted. When we got to the launch area I could see the concrete piers where the old marina had been moored. We kept driving for a 1/4 of a mile past the piers before we reached the water. That was the first time in my life that I considered the notion that our way of life was unsustainable. As I write this the Las Vegas Water Authority is racing to extend the straw deeper into Lake Mead in order to allow that lifeline for Las Vegas to remain below water. It is now estimated that Las Vegas (with over 2 million people) will be without water in 7 years. Last year they had to shut Hoover Dam ( in 1936 considered the engineering marvel of the world) off because the water level had sunk so low. When they estimated the flow of the Colorado river in the 20's and 30's those were exceptionally wet years. Today precipitation is 40% below those levels.

The aquifers beneath the Valley (Vegas) are dry. The deep aquifers beneath Test Site (100 miles to the north) are poisoned with Nuclear radiation from hundreds of underground nuclear bomb tests. Game Over!

The question arises, how much water is actually needed to sustain the population? I would guess that a great deal of it is used for frivolous purposes (at least if the alternative is give up these uses, or abandon your home/town and move out). Once you shut off the fountains, golf courses and let the grass die, is there sufficient sustainable supply then? I know Vegas is securing water from remore areas of the state, so there must be some nontrivial sustainable supply.

They are fighting a plan to pump billions of gallons of water south across the desert for use in the fast-growing Las Vegas area, saying it would eat up groundwater supplies and spell the end for ranchers and farmers in rural valleys.

.. not that I'm trying to claim that those rural valley farms were sustainable, either.

jokuhl - That article is from 2007, before the great shrinkage. They need $2 billion for construction of the aqueduct. Today they don't have the money and currently nobody is going to lend it to them. NV Governor Jim Gibbons is a one dimensional "no new taxes on my watch" Republican. The unemployment and foreclosure rate is the scandal of the nation.

enemy - No offense but you don't get it. Las Vegas was built on a myth: Men can build a kingdom out of the dust. ...and they did. At least for a while. When the myth dies so does the town. Who wants to visit a ghost-town?

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